Inter-city competition for foreign investment: static and dynamic effects of China's incentive areas

Article Abstract:

The sustained influx of foreign capital to China as a result of the country's open door policy provides an opportunity to study the factors that affect spatial distribution of direct investment. A study was conducted to quantify the importance of agglomeration externalities and the function of incentives for attracting foreign direct investment. A model was developed in which the city's current industrial base interacts with its past success in luring foreign investment to improve its desirability to future investors. The parameters of the model was estimated using data on 931 foreign ventures in 54 Chinese cities. Results showed that attractive cities, those having good infrastructure and an established industrial base, received the most foreign investment. Agglomeration effects were found to significantly fortify the direct impact of policy.

China, Foreign investments, Economic policy

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British bus deregulation: competition and demand coordination

Article Abstract:

The deregulation by the UK of its local bus service on Oct 26, 1986 in all cities save London was to produce mixed results during its first six years and was surrounded by reportedly curious phenomenon. The aim of deregulation was to stimulate the provision of cheaper but higher-quality services by introducing the element of competition. The effect lowered cost per bus mile by 36% and increased bus miles run by 20.4% from 1986-1992 in the country save London. However, patronage fell by 21.6%, contrary to expectations, and fares rose by 12.6%. A study has been taken in the light of this particular deregulated UK industry, to provide some implications of deregulation and their rationale, probable social gains to be gained from deregulation and the significance of demand coordination in such a market.

Regulation and Administration of Transportation Programs, Urban Transit Systems, Local and suburban transit, Local Bus Lines, Gnl Transport Regulation NEC, United Kingdom, Competition (Economics), Economic aspects, Transportation policy, Deregulation, Transportation law, Bus lines

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Fortress building in global tax competition

Article Abstract:

Countries form a subgroup to create a cooperative scheme of capital taxation. Such is undertaken since harmonization of capital taxation worldwide is a difficult task. Analysis shows that when tax rates in the initial fully noncooperative Nash equilibrium are strategic complements, cooperation among the subgroup of countries tends to be beneficial. Such relationship illustrates that cooperation leads to gains for countries that are members as well as those that are not members of the subgroup. Under a condition in which tax rates are strategic complements, collusion and commitment among a subgroup of countries to choose a tax rate that is marginally higher than the tax rate in the fully noncooperative Nash equilibrium leads to an increase in the utility of each country in the subgroup.

Analysis, International aspects, Income tax, Alliances, Alliances (Government relations), Tax rates

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